Gold is a valuable store of value, acting as a “safe haven” in economic crises. In 2023, amidst the US continuously increasing interest rates and ongoing geopolitical tensions worldwide, gold once again demonstrated its strength by reaching record prices in December.
The graph below shows the 11 countries with the largest gold reserves in the world as of September 2023, based on data from central banks, the Federal Reserve Bank of St. Louis, the International Monetary Fund (IMF), the World Bank (WB), and the World Gold Council (WGC).
Most countries’ gold reserves are stored in various locations, including central bank vaults and private vaults.
Countries hold gold reserves for multiple reasons. Firstly, it serves as a stable and reliable store of value, increasing confidence in the stability of the economy, particularly during periods of financial instability. Additionally, some countries hold gold reserves to maintain stability of their domestic currency. Another reason is that gold helps diversify a nation’s asset portfolio. Nearly 20% of the world’s total gold reserves are held by central banks.
From the graph, it can be seen that 7 out of the top 11 countries are the largest economies in the world. The United States holds the largest gold reserves, with 8,133 tons stored across 12 Federal Reserve Bank branches nationwide. Germany follows with 3,353 tons.
